This Christmas Be Careful of Credit Card "Deals"
With the average consumer expected to spend roughly $967 this holiday season and outstanding credit card debt expected to reach $1 trillion by New Year’s, store credit cards and retailer financing “deals” are sure to be in high demand.
Where the store credit really get you is through deferred interest. You sign up for the purchase and as long as you pay for the item by a certain date all of the interest goes away.
Now credit card companies don't give out deals like this unless they are profitable in the end. Thus, I would imagine that there are a lot of people who have been burned from deferred interest. These results from wallethub.com speak volumes.
61% of people think deferred interest is unfair, while 50% say it should be illegal.
All of the major retailers that offer 0% financing use deferred interest.
53% of people say 0% financing is a store credit card’s biggest draw.
67% of people who understand how deferred interest works say they would not sign up for such a plan.
Around 99% of store credit cards do not charge an annual fee. In contrast, the average general-use credit card charges $15.82.
The average store credit card that offers rewards in the form of discounts gives you a 22.22% initial discount.
2017’s Best Store Credit Cards